Has the Sports Industry Really Changed? From Selling Goods to Providing Services – How Are They Playing This Big Game?
Hello everyone, I’m your financial observer. Recently, the 2026 China International Fair for Trade in Services (CIFTIS) came to an end, and one of the most popular sections was undoubtedly sports services.
In the past, when we visited sports exhibitions, all we saw were running shoes, team uniforms, and dumbbells – that was about selling goods. But now? You’ll find AI referees, automated video editing, smart training partners, and even the option to rent bicycles or have equipment repaired. Behind this lies a significant shift in business logic: China’s sports industry is completely transitioning from selling products to providing services, and doing so with the help of AI and technology.
Today, we’ll break down this transformation in simple terms for you.
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I. Core Summary: The “Second Half” of the Sports Business Has Begun
In one sentence: China’s sports industry has surpassed a scale of 3.8 trillion yuan, but the way it makes money has changed. It no longer relies on selling equipment and tickets; instead, it focuses on selling “experiences” and “data.”
Key Changes:
1. Technology Becomes More Accessible: High-tech solutions that were once only available in professional competitions (such as electronic line judges and AI analysis) are now affordable for ordinary sports venues.
2. Extended Services: Businesses no longer just sell you a piece of equipment; they take care of everything from finding a venue, coaching you, to repairing your equipment, and analyzing your data.
3. The Real Challenge: Despite the cool technology, the ability to generate sustainable revenue and retain customers is what determines the success of these services.
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II. In-Depth Analysis: A Detailed Explanation from Four Dimensions
1. Technology Becomes More Accessible to Everyone: AI Referees Are No Longer Exclusive to Professionals
[Observation:**
At CIFTIS, when a tennis ball hits the net, an electronic screen immediately tells you whether it’s out of bounds and can automatically generate a match summary. This used to be a feature of major tournaments, but now it’s available at recreational courts for enthusiasts.
[Simple Explanation:**
It’s like how “private chefs” have evolved into “smart cooking machines.” In the past, if you wanted to watch a professional match with a referee and detailed analysis, you had to watch a professional league on TV or hire a professional team. Now, companies like “Orange Lion Sports” have made this technology standard. The basic version costs just 61,000 yuan and lasts for five years. For ordinary sports venues, this investment is worth it because it attracts enthusiasts who want to play like professionals.
- Essence: The barrier to using this technology has been lowered, making it more accessible to the general public. This means that “professionalism” is becoming a consumer product.
2. From Selling Goods to Providing Solutions: The Anxiety and Transformation of Fitness Equipment Manufacturers
[Observation: Shuhua Sports, known for its running machines and dumbbells, has rebranded itself as a “scientific sports service provider.” It no longer just sells a machine; it offers a package of services including AI-based running form analysis and training advice.
[Simple Explanation:**
It’s similar to the difference between selling a phone and selling a phone plus cloud storage and a subscription service. Many people buy a running machine but end up using it just as a clothes rack because they don’t know how to use it properly or don’t receive any feedback. Shuhua offers to analyze your running form and create a training plan for you.
- Business Logic: The machine is just the starting point; the real value lies in the data and services. Once you get used to its training suggestions, it’s hard to switch to another brand. Although this revenue isn’t yet listed separately in their financial reports, it indicates the future direction: hardware is the platform, while software and services are the sources of profit growth.
3. The “Full Lifecycle” Management of Equipment: Decathlon’s Circular Business Model
[Observation: Decathlon didn’t just sell shoes and clothing; it also demonstrated repair, rental, and second-hand services. It opened 219 repair shops in China, and its global rental revenue increased by 43%.
[Simple Explanation: This is a model of sustainable, steady growth.**
- Traditional Thinking: The transaction ends once the product is sold.
- Decathlon’s Approach: The relationship with customers starts after the sale. They offer repair services, which save customers money on replacements, and they also offer rental options. After a rental, they inspect and prepare the equipment for the next user. This model generates multiple rounds of revenue from the same item.
- Key Insight: This may seem complicated (with maintenance and inventory management), but it leads to high repurchase rates and customer loyalty. Although this revenue accounts for only 2.64% of their total, it shows that consumers are willing to pay for convenience and environmental sustainability.
4. The Biggest Challenge: The Reality Behind the Buzz
[Observation: The exhibition was lively, but do the companies really make money? Decathlon’s rental business is growing quickly, but its contribution to total revenue is small; Shuhua’s service revenue isn’t yet clearly reported; it’s uncertain whether Orange Lion Sports’ system will generate enough profit for the venues.
[Simple Explanation: This is the ultimate question for all companies undergoing transformation: being “cool” doesn’t equate to making money. Selling a product once generates a one-time income, but providing ongoing services requires continuous investment in servers, maintenance staff, and software updates. If customers don’t renew their subscriptions or if venues don’t see a significant increase in bookings, the business fails. The operational challenges (repairing equipment, managing inventory, etc.) can lower margins compared to selling hardware.
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III. Insights for Ordinary People
1. If You’re a Consumer:
- Sports will become more intelligent in the future. You’ll enjoy data analysis services previously reserved for professionals at more affordable prices.
- When considering sports equipment, consider rental and trade-in options, especially for activities you’re unsure about committing to (like skiing or cycling), as renting can be more cost-effective.
- Your sports data (running form, heart rate, trajectory) can become valuable assets, and more personalized services based on this data may emerge in the future.
2. If You’re an Investor or in the Industry:
- Beware of Concept Hype: Don’t just focus on who showcases AI; look for companies with real user retention and repurchase rates.
- Focus on Service Delivery: Companies that combine hardware with services effectively and manage costs well will have a competitive advantage in the long run.
- Niche Opportunities: Sports tourism, event rights, and specialized equipment (e.g., for tennis or golf) have low service penetration rates, but there’s huge potential for growth.
IV. Conclusion
The sports section of CIFTIS 2026 reflects China’s sports industry’s shift from extensive growth to refined operations.
In the past, we sold “hardware”; now, we’re selling “time” and “experiences.”
But this transformation is just beginning. The company that can turn high technology into cost-effective, highly recurring services will be the one to reap the biggest benefits from the trillion-yuan sports industry in the next decade. For now, let’s see if these companies can truly make their financial calculations work.